UAW strike day 12: Talks continue amid presidential visit
Negotiations continued Tuesday between the United Auto Workers and the Detroit Three automakers while President Joe Biden visited a picket line Tuesday with UAW President Shawn Fain.
Biden spoke with union members at General Motors Co.'s Willow Run Redistribution Center in Van Buren Township on Tuesday — the 12th day of the union's strike against GM, Ford Motor Co. and Stellantis NV.
Using a targeted plant strike strategy, the UAW called on workers to walk out Sept. 15 at GM's Wentzville, Missouri, midsize truck plant, Ford's Bronco and Ranger plant in Wayne and Stellantis' Jeep Gladiator and Wrangler plant in Toledo. On Friday, the UAW expanded the strike against GM and Stellantis, adding all of their parts distributions centers. Ford was spared since the Dearborn automaker and the union have made progress in talks. With the addition of the parts centers, about 18,300 union members are on strike.
More:UAW strike brings Biden, Trump to Michigan to battle for the American worker
Biden's visit Tuesday marked the first time in at least a century that a sitting president has visited a labor union's picket line, according to the White House. Former President Donald Trump is visiting Michigan Wednesday. The leading Republican candidate for the 2024 election is skipping the second GOP presidential debate on Wednesday evening and instead hosting a rally in Clinton Township with "current and former union members." He'll deliver remarks at automotive supplier Drake Enterprises, whose members are not represented by the UAW.
The union is striking the Detroit Three to fight for higher wages, an end to tiered-wage systems and temporary employee usage, and other demands.
The automakers have offered up double-digit wage increases and cutting the time it takes to get to the top wage rate in half, among other items. Ford's talks with the UAW have progressed since the Dearborn automaker offered to restore of the cost-of-living adjustment that was suspended in 2009; and, for the first time, the right to strike over plant closures.
Fain told reporters that the union is "moving with all three companies still. It’s slower, but it’s bargaining — some days you feel like you make two steps forward, the next day you take a step back. Things are moving, but we just have to see. We analyze every day.”
The automakers are concerned about the UAW's demands pushing their labor costs, which already are higher than their foreign and domestic non-union competitors, up even more.
On Tuesday, Tesla CEO Elon Musk tweeted about the striking UAW-represented autoworkers on the X social media platform, formerly known as Twitter, that he also owns: "They want a 40% pay raise *and* a 32 hour workweek. Sure way to drive GM, Ford and Chrysler bankrupt in the fast lane."
When asked if the union would expand the strike to other plants, Fain said: “We just have to reflect where we are every day. We basically take an assessment as we have talks and see where we are. We could take action tonight; we can wait until the end of the week. That’s the beauty of the situation we’re in right now; we have a lot of options and we’ll use those options when we feel like we need to.”
The strike at GM's Wentzville plant led the automaker to halt production at its Fairfax Assembly plant in Kansas where the Chevrolet Malibu and Cadillac XT4 are built. The Detroit automaker also had to lay off 140 employees at its Toledo Propulsion plant since the facility manufactures parts for the rear-wheel drive, eight-speed transmissions installed in trucks built at Wentzville. Toledo has about 1,382 represented employees and most will continue to work since they make parts for other products.
The strike has also hit some suppliers. Eagle Industries Inc., in a notice to the state, said it could temporarily lay off 171 employees in production and administration out of 230 workers at a plant in Wixom.
Even with a strike and unknowns of what's to come between the Detroit Three and the UAW, the U.S. auto industry’s sales through the end of September showed a continued "robust" recovery, according to a Cox Automotive forecast released Tuesday.
Despite rising interest rates on new vehicle loans and the strike, experts at Cox said sales in September should reach nearly 1.3 million — an increase of more than 13% from 2022. Overall, sales in the third quarter should come in at more than 3.9 million for an increase of more than 15% year-over-year.
After strong momentum in the third quarter, Cox Automotive is increasing its full-year new-vehicle sales forecast to between 15.3 million and 15.4 million units, up from the forecast of 15 million made at the end of the first half of the year.
The Detroit Three and other automakers will report sales for July through September next week. Stellantis and GM will both report on Oct. 3. Ford will report on Oct. 4.
Stellantis went into the strike with higher inventory levels on Dodge, Chrysler, Ram and Jeep models, according to Cox. Ford also had high levels for both of its brands: Ford and Lincoln. Meanwhile, GM's inventory levels on Chevrolet and Cadillac brands were tight. GMC and Buick had higher levels.
Automakers have been working to rebuild new-vehicle inventories but avoid a glut after pandemic-induced parts supply issues limited production for months at a time. The low supply, coupled with continued strong demand, caused prices to increase. Monthly payments on new vehicles were up 24% from August 2019 to August 2023, according to Cox. A strike could put more upward pressure on pricing for some products.
"My concern is that if the strike lasts beyond Thanksgiving, the industry at that point is very likely to see a setback ... and we're going to see it first (affect) the brands and the models with the tightest supply," Cox Automotive Chief Economist Jonathan Smoke said on a call with reporters Tuesday. "So far, the impact has been negligible. However, we are likely to start seeing the first signs of that impact, we think, next month in October, and again, it's going to be in those vehicles that are in the tightest supply."
Dealers on Tuesday were positive about the inventory they have on the ground and in transit to their dealerships. In the pandemic, dealers had to learn how to function with very little inventory and preselling new vehicles before they arrived. They have been starting to see recovery this year.
"We have over 200 units on the ground and another 250 in transit, so there's no effect whatsoever," said Walt Tutak, general manager of Matthews-Hargreaves Chevrolet in Royal Oak.
"We've got the best inventory that we've had in a long, long time. The sad part is things are starting to get caught up, and even in service for parts ... and then this might throw a little bit of a wrench into it."
Across the country in Seattle, Ram, Chrysler and Dodge dealer Jim Walen has ample supply to get through the next month or two. There's more concern about the future availability of parts with Stellantis' parts distribution plants down in the strike.
"Nothing has happened yet," Walen said. "Our day supply is fine ... and I don't think there's negative repercussions with the buying public."
Consumers are more concerned about high interest rates and a potential government shutdown than if Stellantis, Ford and GM "can get along with the UAW," Walen said. "Outside the bubble, it's not as big a deal, but it will be if it continues."
khall@detroitnews.com
Twitter: @bykaleahall
Staff Writers Riley Beggin and Breana Noble contributed.